THE ROAD TO FULL ERP OPTIMIZATION

ADVANCING THE PROCESS, COMMON MISTAKES TO AVOID, AND ACHIEVING LONG-TERM SUCCESS THROUGH FULL ERP OPTIMIZATION.

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2 | ACCELERATE YOUR BUSINESS GROWTH

The numerous benefits of implementing an Enterprise Resource Planning (ERP) system are well known in today’s highly competitive manufacturing environment, where already thin profit margins are being squeezed even further.

To stay ahead of the field, manufacturers increasingly have been turning to ERP software technology, a highly automated system of integrated applications that manage processes, oversee sales, monitor distribution, and coordinate internal company services within a single user-friendly system accessible throughout every department and all locations.

When implemented and used properly, ERP delivers the potential for much greater bottom-line results. When fully optimized, it quickly becomes a highly effective tool to improve planning and scheduling, boost productivity, reveal new growth opportunities, and add to company profitability.

But, the key to finding such success depends upon strong top-down leadership committed to driving organization-wide buy-in by every employee in every department at every division of the company.

This iReport examines key issues that can develop following ERP implementation, common mistakes that should be avoided along the way, suggested steps to advance the process, and full ERP optimization for long-term success.

— Long-time ComTec Solutions employee

on successful ERP optimization

Tell the system what you know,

tell the system when you know it,

don’t lie to the system

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WE’VE IMPLEMENTED ERP. NOW WHAT?The good news is that various software, performance, and technical issues sometimes encountered following ERP implementations 5 or 10 years ago are no longer a concern, according to experts. A good part of that has to do with the development and growing acceptance of cloud technology.

But, once the implementation has gone live, other significant issues can surface today. For example, company

executives may consider the project to be complete at implementation and move on to other business.

Big mistake. Much of the real work toward full ERP optimization actually is just beginning at that stage.

“The (companies) that really understand the process and understand what it’s going to do for them in the future realize that once they’re live they need to continually make sure that they are improving their systems,” according to Rob Moyer, president of ComTec Solutions, Rochester, NY, a company focused on a range of business technology services, including ERP.

It’s critical to keep the original implementation team together and to maintain momentum going forward, he said. They should immediately begin considering which items that weren’t included during the first phase of the project should be moved into phase 2.

“Companies that are doing that are the ones that really succeed, and we see them grow and prosper using their ERP system,” Moyer added.

A key part of the post-implementation success also involves the establishment of effective change management and risk management strategies.

“Change management is huge with these projects and most people don’t even have an individual or a member of their (project management office) that’s focused on it,” Jeff Carr, founder, president, and CEO of Chicago-based Ultra Consultants, said.

Such lack of management involvement not only can create problems and delays throughout the implementation process, it also can cause the entire project to go over budget.

“What you need to do is take inventory of all of your people and categorize them,” Carr

said, referring to the internal champions, the reluctant employees, and those who appear interested, but in reality are nonplused. “By focusing on those people, where they lie, and what level of change is going to happen in their area—is it significant or is it light—you can identify the pockets that you need to focus on to get better acceptance and better use of the system so that they can drive improvements in the business.”

Change management is huge with these

projects and most people don’t even have an individual

or a member of their (project management office)

that’s focused on it — Jeff Carr, Founder, President, & CEO Ultra Consultants

4 | ACCELERATE YOUR BUSINESS GROWTH

AVOIDING OTHER COMMON MISTAKESOther errors to avoid include failure to enact upgrades when new technology becomes available, expecting the system to do something it is not designed to do, allowing select departments—such as sales and engineering—to ignore certain features, and skipping ongoing training programs for both new and current staff.

Generally speaking, companies have three distinct options when planning and choosing their preferred ERP technology: They can purchase software and maintain it in-house on premises; buy the software and have it placed on a hosted server at a data center; or purchase a cloud option, essentially a subscription or rental-type arrangement.

All three options work very well and selection ultimately depends upon customer challenges, needs, and preferences.

But, it remains important to implement all technological upgrades in an ongoing and timely fashion. Companies, especially those supporting their ERP technology in-house, may be inclined to put off upgrades for a year or two because of the commitment necessary, but as more years go by, those upgrades can become harder to implement.

“With the cloud today you don’t have to worry about that,” Carr said. “The capability is there. It’s up to you to decide whether or not you want to use it. But the whole problem tends to go away about not doing upgrades because you’ve got the cloud and you’re paying money for those upgrades.”

WALK DON’T RUNThe ERP experts recommend initially staying focused on the main goal of replacing their old technology, then embarking on a well-

thought-out plan to continue to improve aspects of the system going forward.

Sometimes companies insist on a big-bang approach, holding off going live until every module has been implemented and is running perfectly. “Those are the implementations that can sometimes take a couple of years because they don’t have realistic expectations of their organization and how much horsepower they have to get it all done,” according to Moyer.

“If you break it down into pieces and say, ‘In phase 1 we’re going to implement these modules and then in phase 2 we’re going to look at these modules,’ it’s a

more realistic approach and a lot of times saves a lot of heartburn,” he added.

NAVIGATING TO FULL OPTIMIZATION As mentioned above, one critical roadblock that often needs to be dealt with following ERP implementation involves staff members and departments who, despite best efforts, remain set in their old ways. Engineering and sales tend to be toward the top of that list.

“I think engineering is a huge area because that’s not well penetrated with technology today,” Carr says. “There’s a hodge-podge of technology mostly designed around

Experts recommend initially staying focused on the main goal

of replacing their old technology, then embarking on a well-

thought-out plan to continue to improve aspects

of the system going forward.

5 | ACCELERATE YOUR BUSINESS GROWTH

The information in this

iReport was researched and

produced by Manufacturing.

Net in conjunction with Epicor.

Statistical data was researched

and compiled by Advantage

Business Media in June 2017.

Epicor Software Corporation

(epicor.com) provides industry-

specific business software

designed around the needs of

manufacturing, distribution,

retail and services organizations.

Epicor’s more than 40 years of

experience with its customers’

unique business processes and

operational requirements is built

into every solution — in the

cloud, hosted or on premises.

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ABOUT EPICOR

CAD, but very little around product lifecycle management and very little about change management in that particular area.

“And the whole area of reporting, whether you’re in purchasing or in costing or in inventory or customer service … the whole reporting area is very difficult to get people to change,” he added. “Time and time again we see people implementing these systems, then the staff goes back to using Excel.”

It often takes a formal training program in order to bring them around to the new ERP system, but companies may be reluctant to implement such programs for financial or other business reasons.

Labeling that “a common mistake,” Moyer said ongoing formal training should take place for current as well as new employees, conducted by professionals who know the software, focusing on the latest additions, upgrades, and changes implemented along the way.

Beyond specific personnel challenges, one of the thorniest issues encountered

in the road to full optimization pertains to scheduling, i.e., materials management, resource management, etc.

“In at least 95 percent of the companies that we go into on a new opportunity, scheduling is a big concern,” Moyer says. “We all have to do more with less, we all have customers requiring everything yesterday, demands are more difficult to meet, and so scheduling is one of the largest needs. “It’s also the most difficult modules to implement just because of all the intricacies of it.”

It takes an ongoing commitment on the part of the company to make sure that data entered into the system is correct.

He pointed to a long-time employee who some years back wrote the following saying on the white board in the company training room: “Tell the system what you know, tell the system when you know it, don’t lie to the system.”

“If you live by that motto you will be able to successfully schedule and use the ERP system,” Moyer said.